Cash
A 2.5% inflation rate halves purchasing power in about 28 years. HYSA and T-bills protect short-term cash. Long-term money still needs assets that can raise prices — which is why an emergency fund and a retirement fund are different piles.
Updated 2026-09-08 · 7 min read
Inflation is a tax on idle cash. At 2.5% a year, $10,000 still looks like $10,000 in a decade — and buys about $7,800 of today's stuff. The calculator on this page makes that boring and visible.
Short-term cash should still exist. You cannot eat a total-stock-market fund the week you are laid off. The mistake is treating every dollar as short-term cash.
0–12 months of needs: HYSA or T-bills. 1–5 years: T-bills, CDs, I bonds, short Treasuries. 10+ years: diversified equities (and bonds as ballast).
Do not let a scary CPI print push you into crypto, gold infomercials, or leverage.
Run the numbers: inflation purchasing-power calculator.
No. The job of that pile is to be there on a Tuesday. Earn HYSA or T-bill yield; do not chase stocks with rent money.
If inflation is 2.5% and you pay tax on the interest, the real after-tax yield is smaller than the APY on the billboard. Still better than 0.01% checking.
I bonds track inflation plus a fixed rate, with a one-year lock, $10k electronic per person per year. Useful for a slice of 1–5 year money, not a full emergency fund you might need next month.
Educational only. Verify IRS limits and loan quotes before acting.